Current situation is house in Lancaster CA is being rented Section 8 housing, balance on mortgage is 104K at 3.5% current mortgage payments are 600, rent payments are 1400. The customer wants to sell for 135-137, ARV is 145, repair costs of house is unknown.

Under this circumstance I plan on tying up the property as a “subject to” current loan. Would it be worthwhile to offer 30K cash with the clause of keeping the current loan in place over the duration of the loan?

From here I could pay the mortgage and take the cash flow of 800 or I could market the property as a for sale by owner with a “lease option” contract?

Could you clarify... are you just giving the owner 30k and then they're out of the picture other than keeping the loan that you pay on?

I guess you'd have to see what repairs are needed too. If they were to sell this house on their own, for say 135k, they're looking around 8k in realtor commision, maybe some closing costs, getting the house show ready, so maybe 12k all in all and then their mortgage of 104k.... seems like if you're paying 30k, you're being a bit generous. Granted, you are picking up a house with an existing loan, which does have value since it's not in your name.

Another thing to look at is this... is that a section 8 rent rate? What if that tenant moves out and it becomes a market rate? What's the market rent rate?

@Scott Stevens - you are correct, I just threw the 30k out there because that is what the seller wanted to net from this deal, I have still not negotiated with her. The goal would be to come into this deal for as little cash as possible and have the options to control the property ( straight sale, for sale by owner, wholesale) or just collect on the current cash flow.

I do not know the Market rents outside of section 8, but I'll look that up